Previous Day's Market Highlights
As was widely expected, the Fed announced a rate hike of 25 basis points to a target range of 1.50% to 1.75%. However, the Fed’s guidance was considered less hawkish than some investors had been expecting, with the median number of rate hikes projected this year unchanged (a further two), and the dollar weakened. As a result, sterling-dollarreclaimed 1.41 and euro-dollar made gains above 1.23 but met resistance ahead of 1.24.
Earlier in the day, UK wage data surprised markets, rising more than had been projected. Sterling moved higher on the release, breaking 1.1450 against the euro for the first time since 1 February. Sterling-dollar continued to trade above 1.40. The pound hit new highs against the Aussie since the referendum and against the kiwi since December.
In other data news, the US Current Account deficit widened in Q4. The RBNZ kept interest rates on hold at 1.75% as was expected, again saying that monetary policy “will remain accommodative for a considerable period”. The lack of surprises had a limited effect on the kiwi dollar. The Aussie dollar weakened overnight after Australian employment data disappointed as the Unemployment Rate rose to 5.6%.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
Today's Market Highlights
Attention today shifts to the Bank of England. While no policy changes are expected, investors will be paying close attention to any clues in the Bank’s guidance that May is in play for a rate hike. Market expectations of a May hike rose after the BoE took a more hawkish tone than expected last month, saying that rates may need to rise sooner than markets had been expecting—November, at the time. Any such clues could strengthen the pound, while if market expectations are disappointed, sterling could instead weaken.
Earlier in the day, markets will keep an eye on the UK’s February Retail Sales, which are forecast to have picked up month-on-month but slowed year-on-year. In the afternoon, attention turns to US data, including weekly Initial Jobless Claims and Markit Manufacturing and Services PMIs.
Brexit and US trade policies are on the agenda at the European Council meeting staring today.
Today's Economic Calendar
|24hr||EUR||European Council Meeting|
|09:30||GBP||Retail Sales MoM (Feb)||0.4%||0.1%|
|09:30||GBP||Core Retail Sales MoM (Feb)||0.4%||0.1%|
|09:30||GBP||Retail Sales YoY (Feb)||1.3%||1.6%|
|09:30||GBP||Core Retail Sales YoY (Feb)||1.2%||1.5%|
|12:00||GBP||BoE Interest Rate Decision||0.5%||0.5%|
|12:00||GBP||Monetary Policy Summary, Minutes|
|12:30||USD||Initial Jobless Claims (16 Mar)||225K||226K|
|13:00||USD||Housing Price Index MoM (Jan)||0.5%||0.3%|
|13:45||USD||Markit Manufacturing PMI (Mar)||55.5||55.3|
|13:45||USD||Markit Services PMI (Mar)||55.8||55.9|
|17:00||GBP||BoE Ramsden Speaks|
|18:45||CAD||BoC Wilkins Speaks|